Not long after China and Australia have passed the bumpy road and come back to "business as usual", both sides set to resume the Free Trade Agreement (FTA) negotiations. Why is the FTA so important and urgent to both China and Australia? How does a free trade agreement benefit China particularly?
Australian Trade Minister Simon Crean told Xinhua in an exclusive interview on Tuesday "A comprehensive and high quality FTA would serve the long-term interests of both Australia and China by underpinning the continued expansion of trade and economic links between our two countries."
Crean said Australia and China enjoy strong economic complementarity.
China would obtain more reliable access to inputs it needs for its further economic development, including food, fibres, minerals and energy. The FTA has the potential to enhance China's energy and food security, and provide a framework for two way investment flows.
China and Australia are economies of different development stages while Australia enjoys advantages in many areas. In the next round of negotiations, how will Australia address those differences and coordinate with China?
The complementary nature of our two economies is one of the key reasons why a comprehensive and high quality FTA is in the interests of both countries, the Trade Minister told Xinhua. "For instance, as an advanced economy, Australia is well placed to support China's progress towards developed economy status. Areas of potential cooperation include financial services, education services, urban planning and design, and clean, green
environmental services."
Crean said while it is true that economies of China and Australia are at different stages of development, an FTA would significantly enhance and deepen the trade and economic relationship to the benefit of both countries.
He admits the negotiations are "challenging" because China has not previously negotiated an FTA with a country that has such extensive
interests in agriculture, resources, services and investment.
However, the minister is confident that both sides are committed to working together in a positive and practical spirit to conclude the
negotiations as rapidly as possible, including finding ways to overcome any differences and to negotiate a mutually beneficial outcome.
Referring to Vice Premier Li Keqiang's recent visit to Australia, Crean said the country was pleased to host a very successful visit to Australia by the Chinese Vice-Premier, Li Keqiang in October 2009.
"Li's visit produced a bilateral Joint Statement (the first since the establishment of diplomatic relations in 1972), and Memoranda of
Understanding on education and training, combating illegal logging and protection of cultural property."
Although bilateral relations encountered some difficulties earlier this year, the relationship has been restored to an even keel and Australia is committed to building a mature, balanced long-term relationship with China,
based on shared interests and mutual respect, he said.
China is now Australia's largest trading partner. Total trade ( goods and services) with China increased by 30 percent to 83 billion dollars (77 billion U.S. dollars) in 2008-09, according to Crean.
"This dramatic expansion in our bilateral economic relationship reflects the complementarity between our two economies and the extent to which China's prosperity is underpinned by Australia's energy and natural resources."
In Tuesday's interview, the minister also said, "China is also an increasingly important investor in Australia. Since November 2007, the
Government has approved over 100 Chinese investment proposals worth almost 40 billion dollars (37 billion U.S. dollars) . Australia sees China's increased investment interest as a positive development that will benefit both countries."
Investment is, of course, a two-way street. Australia will continue to seek greater access for Australian investors in China, including in the financial services sector and other areas such as mining and manufacturing, he said.